How Paul LePage turned around Maine, by the numbers

Photo courtesy Paul LePage, Maine’s Governor Facebook page.

AUGUSTA – It was a turnaround job, and Governor Paul LePage made a private sector career out of turning around failing organizations. When he took office, Paul LePage faced a state mired in budget shortfalls and deep in debt, with unpaid hospital bills, high unemployment, unsustainable welfare spending and personal incomes lagging.

Maine Examiner has done the research to provide a “by the numbers” look at some of the key data that shows how Paul LePage fared in turning Maine’s government and economy around.

The Maine Economy

According to the U.S. Department of Labor’s Bureau of Labor Statistics, in January of 2010 when Paul LePage took office, Maine’s unemployment rate was 8.2%.

In November of 2018, the latest month data is available, Maine’s unemployment rate is 3.4%.

The number of Mainers working in this same time period grew by about 43,000 from 637,000 in January 2010 to 680,000 in November 2018.

To put the number of people in Maine added to our workforce during Paul LePage’s time as Governor in perspective, it is more than the total population of the cities of Lewiston or Bangor.

The number of Mainers who were unemployed dropped by a stunning 33,000 people, from 57,000 to 24,000.

The per-capita income of Mainers also saw a dramatic change under Governor Paul LePage, rising about 18% from $37,854 in 2010 to $44,787 in 2017.

At a broader level, Maine’s gross domestic product rose by about $10 billion, almost 20%, in current dollars from 2010 to 2017 according to the Bureau of Economic Analysis.

Maine’s 2017 GDP was $61.7 billion. Almost all of Maine’s GDP increase is attributable to private sector industry growth.

Maine Government Debt

In 2018, Maine’s general obligation bond debt was $376 million, down about $124 million from the $500 in general obligation bond debt on the books in 2010.

Maine State Employee and Teacher pension debt was about $2.95 billion, down almost $1.5 billion from $4.43 billion in 2010.

Maine’s ‘moral obligation bonds’ debt (which is basically the bond debt owed by quasi-governmental organizations such as Maine Housing and the Finance Authority of Maine, is down about $850 million, from $3.92 billion in 2010 to $3.07 billion in 2018.

Transcap bonds, another borrowing mechanism available to state government, are down almost 25% from $183 million in 2010 to $140 million in 2018.

At the start of Paul LePage’s first term, Maine also faced a significant crisis from years of unpaid Medicaid bills to Maine hospitals. That debt totaled more than $500 million. That debt was paid in full to hospitals by borrowing against the state’s revenue stream in the liquor business.

About $140 million is still owed against those bonds. In the five areas of government debts described above, the state’s debt has been reduced by almost $2.9 billion, or about 30%, from 2010.

Maine State Budgets

In addition to having a stack of unpaid hospital bills to pay when when he took office, Paul LePage also had to wrestle with a $1 billion state budget shortfall within two months of taking office.

To put that in perspective, the state budget was about $5.6 billion, which meant as Governor LePage took office, the state of Maine was short almost 20% on the amount of money it had committed to spend in the entire two year budget.

The budget turnarounds did not happen all at once, two years into his first term in 2012, Governor LePage still faced a $756 million budget shortfall.

But by the time Paul LePage’s second term was complete, the state announced a surplus of over $175 million, completing a turnaround of almost $1.2 billion from deficit to surplus in 8 years.

Rainy Day Fund

Near the end of Governor John Baldacci’s term, the state’s ‘Rainy Day Fund’, savings set aside for emergencies, was wiped out. Some experts recommend keeping cash reserves roughly equal to 15% of a state’s budget.

Paul LePage inherited cash reserves of a fraction of one percent of the state budget, approximately $7 million in rainy day reserves in a budget of just short of $6 billion.

As he leaves office, Maine’s Rainy Day Fund is funded with $273 million in cash, which is nearly twice as many dollars as the fund ever contained before LePage took office, according to Legislative records.

Maine’s Welfare Programs

The largest portion of the budget shortfalls Paul LePage faced when he first became Governor were in Maine’s welfare programs, such as Medicaid (Mainecare) and other programs providing benefits to people with low-incomes.

Under the previous administration, expansions of eligibility and loosening of work restrictions had allowed programs to grow to what Gov. LePage said were unsustainable levels. In 2011, one in three Mainers was receiving benefits of some kind.

Maine’s TANF caseload in June, 2018 was about 7,500, down by more than 10,000 from 18,000 in 2010, a reduction of about 58% in dependence on the program.

In June of 2010 about 280,000 of Maine’s 1.3 million residents were enrolled in Medicaid. This number had increased by about 120,000 since 2000.

But in September of 2018, Maine’s Medicaid enrollment was about 261,000, about 19,000 recipients less than in June of 2010.

Political pundits will analyze and debate Paul LePage’s impact on Maine politics for years to come, but his impact on ‘turning around’ the state of Maine’s economy and financial problems will be clear in the numbers historians look back at to understand his legacy.

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